This Paper presents a formal theory of reciprocity. Reciprocity means that people reward kind actions and punish unkind … ones. The theory takes into account that people evaluate the kindness of an action not only by its consequences but also by … the intention underlying this action. The theory explains the relevant stylized facts of a wide range of experimental …

Hidden Markov Model that answers the question, taking into account that often we do not know whether a cartel exists in an …

bargaining situations. There is also strong evidence that people exploit free-riding opportunities in voluntary cooperation games …. Yet, when they are given the opportunity to punish free riders, stable cooperation is maintained although punishment is …

bottom-up budget process. We show, using structurally induced equilibrium theory, that this need not be the case. To test the … implications for budget processes of structurally induced equilibrium theory, we conduct a series of experiments. The evidence from … these experiments supports the predictions of structurally induced equilibrium theory, both at the aggregate and at the …